The Cabinet Office has commenced a consultation on the secondary legislation to be implemented under the Procurement Bill. This insight from the Capsticks’ procurement team summarises what it covers and what this means for public procurement in 2024 and beyond.

Consultation on secondary legislation

Under the new Procurement Bill a number of provisions will be set out in “secondary legislation” known as Statutory Instruments. This is to avoid long lists being included within the main legislation and to allow flexibility to make changes in certain areas, for example, where this sets out figures that may be reviewed in the future.

The consultation is divided into two parts and Part 1 has now been issued for consultation. This closes on 28 July and covers the following areas:

• Scope of Light Touch Regime Contracts and Reservable Light Touch Services
• Exempt Contracts: Vertical and Horizontal Activities Calculations
• Exempt Contracts: Utilities Intra-group Turnover Calculations
• Utility Turnover and Supply Tests
• Intra-UK Procurement
• Definitions of ‘Central Government Authority’ and ‘Works’ for Thresholds
• Disapplication of section 17 of the Local Government Act 1988
• Disapplication in regard to NHS procurement (in the context of healthcare services).

The second part of the consultation is likely to be of more significance, covering the transparency provisions and the (many) notices that will be used by contracting authorities under the Procurement Bill.

The consultation on Part 2 is due in July 2023. The Procurement Bill itself is now expected to come into force in October 2024.

Disapplication of the Local Government Act

Local Authorities and suppliers in this sector should note the disapplication of section 17 of the Local Government Act 1988 (LGA). This is to tie in with Procurement Policy Note 11/20, which allows below threshold contracts to be reserved:

• to suppliers in the UK, a particular county or a particular London borough; and/or
• for Small and Medium Sized Entities and Voluntary Community and Social Enterprises.

The Procurement Policy Note (PPN) is not a legal requirement for Local Authorities, but the principles it sets out are considered best practice. This, however, created a conflict for Local Authorities as they are prohibited under the LGA from taking into account “non-commercial matters” in their procurement decisions including “the location in any country or territory of the business activities or interests of, contractors”.

The provision proposed will remove this conflict, giving Local Authorities more flexibility to apply the principles set out in the PPN for below threshold procurements.

This will only apply to contracts entered into on or after the new Statutory Instrument comes into force (which will likely be October 2024), so the position remains unchanged for Local Authorities currently. 

Disapplication in regard to NHS procurement

The new Statutory Instrument will also confirm that the Procurement Bill will not apply to procurements to which the Health Care Services (Provider Selection Regime) Regulations 2023 apply (“the NHS Provider Regime”).

This means that healthcare services provided to patients and service users and procured by certain NHS bodies (combined authorities, integrated care boards, local authorities in England, NHS England, NHS foundation trusts and NHS trusts) will be outside of the Procurement Bill. These healthcare services will instead be subject to their own bespoke regulations under the NHS Provider Selection Regime. At the time of writing, the NHS Provider Selection Regime is not expected to come into force until late 2023 according to the most recent update from NHS England.

The Procurement Bill will still apply to NHS procurement of goods, other types of services and works which are not subject to the NHS Provider Selection Regime. NHS bodies and suppliers in this sector will therefore need to be aware of both sets of legislation moving forward, but this provision does prevent both sets of legislation applying when procuring or bidding for healthcare services which will no doubt be welcomed.

How Capsticks can help

Capsticks acts for both contracting authorities and bidders and we continue to track the Procurement Bill as it progresses. With extensive knowledge of procurement law, our specialist team are always on hand to review to support you with all aspects of the procurement process and how to get ready for the new Procurement Bill.

Please speak to Katrina Day or Mary Mundy to find out more about how Capsticks can help.

Tiffany Cloynes is a Partner and Head of Local Government at Capsticks. Please get in touch if you have any queries in relation to Local Authority projects.